RUSSIA WILL NOT SIGN CIVIL AIRCRAFT AGREEMENT WITH WTO

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MOSCOW, May 14 (RIA Novosti) - Russian airlines will not be able to buy cheap foreign aircraft in the next seven years and according to Trade and Economic Development Ministry officials, Russia will not sign an agreement on civil aircraft with the WTO, which envisages a number of limitations on subsidizing aircraft manufacturing and the lowering of import duties to 0%, Biznes reported.

Today the airlines that purchase foreign aircraft should pay the state 38% of their market cost (20% is a customs duty and 18% is the value added tax). The air carriers operating international routes are convinced that cancellation of import duties will make them and their foreign rivals equal.

The Trade and Economic Development Ministry says the opposite. Maxim Medvedkov, chief of the ministry's department for trade negotiations, who conducts the talks on Russia's accession to the WTO, announced to the Transport Workers' Union of Russia that the present level of duties for aircraft will remain for seven years following the accession to the WTO.

"It is a poorly considered decision," General Director of UTair Andrei Martirosov said. "The state gives us no chance to use the moment that is almost ideal for purchasing foreign planes. The aircraft industry is in crisis, and no planes with 60 to 120 seats are manufactured for regional air transportation, while cheap Western aircraft have appeared on the market."

Head of the Aeroflot Press Center Irina Dannenberg agreed. "Quite soon we will have to discard the Tu-134 and Tu-154 liners, but Russia has no serial manufacture of aircraft that could replace them."

The Russian aircraft industry, on the contrary, welcomes Medvedkov's statement. "It is in harmony with the president's position. It would be strange if the duties were to be cancelled now that it has been decided to support the Russian aircraft industry," the press service of the Ilyushin Finance Co. leasing company said.

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